Smartphone scams plentiful during holiday season

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On some level, we all know that smartphones are essentially mini-computers. But in reality, based how most people use their smartphones, security experts say most of us don't have a clue.

With record online spending predicted this year, Seattle-based Internet security firm Casaba predicts this will also be a big year for online fraud and identity theft. Casaba says smartphones are primary targets because people get careless and open the door to scammers.

Casaba co-founders Jason Glassberg and Chris Webber call their company "ethical hackers." They and their tech team work with Fortune 500 companies and government agencies to help protect their systems from hackers by showing them how scam hackers break in.

In a demonstration, Glassberg and technical expert Walter Pearce set me up with a smartphone, which I took shopping at a local mall. The phone was equipped with a free ringtone app featuring several Christmas songs as ringtone options. But the app had been altered to track my activity.

As I shopped, I texted Mary Nam. I called Dan Lewis. I used the phone to take several photos, send email, and do a Facebook search. The whole time, Glassberg and Pearce were uploading everything on their laptop. And I mean everything.

They captured my location, the pictures I took, my internet searches, my call to Dan, the text to Mary, even Mary's response. Had they been real scammers, they'd have a gold mine of information -- everything I did with that phone including my phone number, my friends cell numbers and soc network sites and the email addresses I contacted.

That's information they would be able to use to make spam emails and spam texts look like they came from, Dan, Mary or me. If I'd shopped online, they have my passwords and account numbers.

"It happens all the time," said Glassberg. "And that's what we're hoping to make people aware of. These phones themselves are just little computers, and the same protections that you would think about doing on your home computer or your laptop, your PC, you want to do on your phone as well."